Key Takeaways
- A new year’s Bitcoin rally has pushed the cryptocurrency’s price above has $45,000.
- Looking ahead to the next milestone, Matrixport forecasts BTC surpassing $50,000 before the end of January.
- Many experts have predicted Bitcoin will record a new all-time high in 2024.
The last time Bitcoin traded above $50,000 was in December 2021. Back then, the new year landed amid a brutal bear market that saw the cryptocurrency lose roughly two-thirds of its market capitalization in six months.
This January, however, BTC has a more bullish wind in its sails. It entered 2024 with a strong rally that saw it break above $45,000. With all eyes on the next key milestone, crypto services platform Matrixport recently predicted “an explosive Bitcoin surge to $50,000 looms large in January”.
New Year Rally Pushes BTC Above $45K
After failing to deliver a true Santa Claus rally, the price of Bitcoin was relatively flat toward the end of 2023, closing out the year at the low end of the $41,000 to $44,000 range in which it traded for most of December.
However, in the first two days of 2024, BTC surged by around 8%. This spike saw it break through $45,000 for the first time in 20 months.
With most analysts expecting the US Securities and Exchange Commission (SEC) to approve spot Bitcoin Exchange Traded Funds on January 8, 9, or 10, an anticipated surge in demand for BTC appears to be driving the cryptocurrency’s recent gains.
The question appears to be not if or when ETF approval occurs, but what effect it will have.
Speculating that ETF approval will trigger an immediate surge in demand, on Tuesday, January 2, Matrixport researchers said they expected Bitcoin prices to rise “significantly” by the end of the month.
Matrixport Predicts Will Hit $50K in January
A US-listed spot Bitcoin ETF potentially putting between $24 billion and $50 billion of fresh capital into the BTC market. As a result, Matrixport pointed out that the conditions were right for a major supply crunch post-approval.
In Tuesday’s report, analysts suggested ETF issuers may soon start buying up billions of dollars worth of BTC at a time when low exchange liquidity is placing significant pressure on the available trading supply.
Since the end of 2022, the so-called Alameda Gap has suppressed liquidity significantly. More than a year after FTX-Alameda collapsed, the loss of one of Bitcoin’s largest market makers can still be felt.
With long-term holders currently controlling around 75% of all BTC in circulation, in November, the share of all coins not held on exchanges climbed to its highest level since the cryptocurrency’s first year of life.
Matrixport also noted that the scheduled Bitcoin halving in April could further compound the supply shortage. Pointing out that mining companies tend to limit how much fresh Bitcoin they release on the open market around the time of the halving, the report implied that another “massive” price spike” in could occur in the coming months.
On the Road to a New BTC All-Time High?
With Bitcoin on the cusp of a crucial symbolic breakthrough, analysts are already looking ahead to the next milestone.
From $50,000, Bitcoin will need to climb less than $18,000 to surpass its previous all-time high price. If it repeats the gains it made last year, it could set a new record by the end of 2024.
Noting that the Bitcoin market has historically witnessed its most dramatic rallies in the 12 months after each halving, an analysis by ETF manager VanEck forecasts the key moment arriving in November.
Meanwhile, some experts have projected BTC smashing through its previous record to hit highs of $500,000 or more by the end of the year.
